Recession
The People Lessons Learned from the Downturn
By Joe Ungemah, Principal Consultant at SHL
Mar 30, 2010 - 11:21:46 AM

Although too early to predict when and how recovery will occur, it is time to take a deep breath and take stock of what we have learned over the past year and half.

These lessons are not limited to finance or debt control, but extend to the fundamentals of people management.

In the panic that was 2009, major employers found themselves bombarded with serious choices about how to transform their businesses and react to a rapidly deteriorating economic environment.

Even if a magic bullet was found, change stagnated when it came to implementation, as employers found that locating the right talent, deploying them quickly, and embedding new ways of working was no easy task.

What we learned is that organisational adaptability is not about the present time, but the managerial practices that precede crisis.

How a company manages its workforce prior to a downturn can predict how efficiently leaders can transform their businesses and set employees to task on bringing a new strategy to life.

I believe that there are three lessons for people management that we should learn from our recent hardship, especially if another dip is experienced this year as predicted by some economists.

First, keep roles tidy.  When boom occurs, it is very easy to promote employees in recognition for excellent business performance, with titles and remits that exist in name only and have no relationship to the employee’s day job.

This inflation in roles, where ‘supervisors’ and ‘managers’ hold no real managerial responsibility, cripples a change process by muddying a view as to where talent is in the business.

Not knowing who is most appropriate for a new role takes time to untangle, delaying any change in business structure or working practice.

Second, monitor and record personal performance.  Most companies have a formal performance management system in place, but often the quality of this information falls short of usefulness.

Very few people enjoy conducting or undergoing appraisal, however appraisals are the most important mechanism for ensuring that employees understand what is expected of them and how they are fulfilling role requirements.

It is staggering how bad the quality of performance information is for Irish businesses, either due to leniency in managers’ ratings or poorly constructed measures.

Not having quality performance data to hand can lead to costly delays during change or worse, misinformed decisions about redundancy or redeployment.

Lastly, mind the consistency of communications.  How employees were communicated with, as well as the content of those messages, has changed dramatically as a result of the downturn.

Every organisation has a unique identity that influences how work is organised, the interactions shared by employees, and the products and services delivered to customers.

When rapid change is required, we sometimes lose site of the impact our messages will have on employees, threatening the glue that has helped build the organisation up.

The doom and gloom messages we have sent to employees jar with the values they uphold, around fair treatment, concern for the customer, or excellence in innovation.

Few employees will argue that change is unnecessary, but they also need to be assured that their needs and values will be looked after and this is where consistency in communication is influential.

These three lessons about organisational structure, performance management, and communications are not the most glamorous of managerial topics.  They do not grab headlines or inspire employees.

Yet, these managerial principles can ensure that employees are prepared and nimble enough to react to future economic shocks and therefore, are lessons that should be learned from the downturn.

Joe Ungemah, Principal Consultant at SHL